The Generalist vs the Domain Expert - Which Will Earn You More?

The Generalist vs the Domain Expert - Which Will Earn You More?

Hiring an independent contractor vs salaried employee depends on your investment firm's long and short term goals. Here are some differences to consider.

Generalists are your company's ambassadors and relationship builders

Hiring an independent contractor (Domain Expert) instead of a salaried employee (Generalist) isn’t always the right call. There are certain people you want or need in-house. If you’re looking to develop clientele, for example, a contractor might not be the best choice. In-house employees are aware of everything that’s going on in the company, and can leverage that knowledge to your advantage when building relationships with clients, developing marketing communications, and promoting the company to colleagues and associates. Freelancers don’t have that access, nor often the incentive.

Generalists also bring long term stability to implementation of business plans, and are more accountable to senior executives for executing strategic goals. But that accountability also bears a heftier price tag in salary, benefits, stock options and other future obligations carried on the books. A steady increase in earnings over time can justify that expense - but it leaves you less nimble to adapt to changing market conditions. In general, a freelancer is the perfect solution for short-term projects, one-off tasks, infrequent work or work that needn’t be performed 9 to 5 or onsite.

Independent domain experts extend your company's global reach

Freelancers enable companies to find talent outside their geographical limits. Expansion or an understanding of new markets can be made with a finite budget outlay and lower ongoing overhead. Using a freelancer may open the door to growth while minimizing risk for your firm if things don’t work out.

Domain experts can help drive bigger returns

The majority of GP operating costs lie in headcount. When faced with a tighter budget, GPs should consider leaning up their core investment staff and hiring domain experts on a project-by-project basis to support individual transactions. This approach has the dual benefit of (1) lowering overall HR costs by replacing fixed costs with variable resources that can be scaled as and when there is deal flow and (2) simultaneously improving the breadth and depth of an investment team in an increasingly competitive, low-fee environment.

At Graphite, we are seeing more and more investment firms adopt this approach by hiring sector experts to help execute transactions on a deal-by-deal basis instead of maintaining large teams of generalist investment professionals. We are also seeing investment firms encourage their portfolio companies to utilize flexible talent (freelance investment bankers, consultants, industry experts and interim CFOs) to support capital raises, add-on acquisitions and other strategic initiatives, thereby freeing up in-house investment staff to focus on deal execution.

Online specialist hiring platforms like ours have made it significantly easier to access specialized skills sets on demand at an affordable price. With that in mind, if you run an investment firm, make sure you are leveraging the disruptive power of global hiring platforms and flexible talent pools to improve your HR efficiency, and ultimately deliver better returns to your investors.

Graphite's highly vetted pool of talented professionals includes top tier domain experts in finance and marketing as well as generalists available for full time roles such as CFO, Accounting and more. Browse our talent to see more, and use the advanced search filters to find your target.

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